Banks should stop offering free current accounts if Britain wants to stamp out mis-selling scandals, according to the future regulator responsible for the UK’s financial stability.
Free banking is a myth
Andrew Bailey, executive director of the Bank of England, is in line to supervise Britain’s banks as the head of the new Prudential Regulatory Authority.
Reacting to Mr Bailey’s announcement, Which? executive director Richard Lloyd warned: ‘It’s a complete myth that banking is free now – consumers pay over £9 billion a year in fees and lost interest on their current accounts. The idea that if banks charged more, they would stop trying to mis-sell other financial products is completely unfounded.
‘We need to see greater transparency about the true cost of banking. All banks should be required to provide downloadable electronic information so that people can clearly see how much they currently pay for their accounts and make “one-click” comparisons between accounts.
‘With comments like those made today, it’s even more important that the new regulator, the Financial Conduct Authority, is a watchdog that stands up for consumers and stands up to the banks.’
Watchdog not Lapdog campaign
We believe the new financial regulator should stand up for consumers and challenge the banks, which is why we launched our ‘Watchdog not Lapdog’ campaign.
At the start of next year, the current regulator, the Financial Services Authority (FSA), will split into two new authorities:
- The Financial Conduct Authority (FCA), which will have responsibility for protecting consumers.
- The Prudential Regulation Authority (PRA), which will focus on maintaining financial stability.
We want to ensure that the FCA puts consumer protection at the heart of everything it does and make sure it becomes a watchdog that keeps the financial services industry in check, not a lapdog that panders to it.